Int'l Tax News

Switzerland said the countrywas committed to remaining an attractive business hub in light of a landmark deal by the Group of Seven rich nations that could help countries collect more taxes from big companies. "Switzerland has taken note of this expected declaration of intent by the G7," the State Secretariat for International Finance said in an email. "For Switzerland, the focus is on the overall package of competitive framework conditions for its own location. Eitherway, Switzerlandwill take the necessary measures to continue to be a highly attractive business location."

A tax deal between theworld's richest countries brings global governments a step closer to clawing back some power from technology giants that have used century-old regimes to build upwealth eclipsing the economies of most nations.while aweekend accord struck by Group of Seven finance ministers aims to close the net around all major multinationals, the tech industry is particularly adept at taking advantage of the current system. That's because its main assets -- software code, patents and other intellectual property -- are relatively easy to maneuver compared to physical assets.

Spain is pushing aheadwith its unilateral digital services tax, but it may shelve the measure if negotiations to reform international taxation are successful, a Finance Ministry spokesman said. The government sees theweekend G7 agreement as an important step, but itwon't change its digital tax plans at such an early stage of discussions, the spokesman said. "Nowwewill have to see how the plan develops in the G20 and the OECD," he added.

French Finance Minister Bruno Le Maire said Amazon.com and other tech giants must fallwithin scope of international tax plan. In an interview on RMC, Minister Le Maire also mentioned, "Amazon has to be in it,wewon't have a minimal tax on companies of at least 15% so that the biggest digital companies like Amazon are let off, Francewill fight so it's there." Part of Amazon's business like deliveries don't generate enough profit to qualify,while other operations like for the cloud are very profitable; "The solution is to divide this into segments and taxwhat is very profitable," he said.

The Group of 7 nations agreed to back a new global minimum tax rate that companieswould have to pay regardless ofwhere they are based.

The Biden administration is trying to persuade other nations to approve a global minimum tax as itworks to curb profit shifting and raise corporate taxes in the United States.

The tax deal agreed by theworld's leading advanced nations thisweekend is the first substantive proof of revived international co-operation since President Joe Biden brought the US back to the negotiating table. Yet there is still a long road ahead before it can be implemented.

G7 tax deal and EU breakthrough on disclosure highlights shift in the openness democratic societies expect.

The G7 advanced economies have struckwhat they have termed a "historic agreement" on taxing multinationals in a bid to create unstoppable momentum for a global deal.

EU negotiators have agreed rules to force large multinational companies to disclose publiclywhere they book profits and pay tax in the bloc as part of Europe's drive to clamp down on corporate tax avoidance.

The Biden Administration is seeking to fund its tax proposals through various means, including raising the corporate tax rate andchanging the base erosion and anti-abuse tax to the stopping harmful inversions and ending low-tax developments (SHIELD) regime.

Positive signals from OECD ministers about a package of proposals to modernize the international corporate tax system could lead to an accord among the countries negotiating the plan, the OECD's new secretary-general said.

Representatives of the European Parliament and EU member states on June 1 agreed on a draft directive requiring multinational companies to publicly disclose details about their economic activities in each country.

To best combat harmful tax practices, qualified majority voting (QMV) should be accompanied by enhanced state aid enforcement and the inclusion of a minimum effective tax rate in the EU Code of Conduct for Business Taxation.

The United Stateswill hold off on retaliatory trade actions against six trading partners over their digital services taxes to give more time for countries to conclude multilateral negotiations on a global tax reform agreement.

Senate Finance Committee Chair Ronwyden, D-Ore.,wants more information on the tax practices of AbbVie Inc. after accusing the pharmaceutical giant of sharply reducing its effective tax rate by shifting profits overseas since passage of the 2017 tax law.

Questions are arising overwhether one of the U.S. Treasury's green book proposals designed to strengthen anti-inversion rules may be interpreted so that it reaches beyond inversion transactions and applies much more broadly.

Treasury's spurning of the base erosion and anti-abuse tax in favor of the stopping harmful inversions and ending low-tax developments (SHIELD) proposalwas a result of the BEAT's failures of being both overinclusive and underinclusive.

After meetingwith Treasury Secretary Janet Yellen and Treasury staff, Senate Finance Committee Chair Ronwyden, D-Ore., and Houseways and Means Committee Chair Richard E. Neal, D-Mass., said in a joint statement they"are optimistic that a strong multilateral agreement can be reached to harmonize our international tax rules, end the race to the bottom, and put a stop to digital services taxes," they said.

Practitioners should not equate silence on some issues in Treasury's proposal modifying the global intangible low-taxed income provisionwith an unwillingness to revisit elements thatwould become more burdensome to taxpayers following a country-by-country shift.

The administration sees an agreement on a minimum tax as away to prevent companies from making decisions aboutwhere to locate based on corporate tax rates. Administration officials also see an agreement as away to prevent U.S. multinational corporations from becoming less competitive if the U.S. raises its corporate taxes. Treasury Secretary Janet Yellen said at a House hearing on Thursday that the U.S. is attempting to reach an agreement on a global minimum tax "thatwould stopwhat's been essentially a race to the bottom, so that it's competitive attractions of different countries that influence location decisions, and not tax competition."

Group of Seven (G-7) finance ministers thisweek are expected to pledge to be ambitious about the rate for a global minimum tax as international tax negotiators are seeking to reach a deal in July, Reuters reports. The Biden administration has floated a global minimum tax rate of at least 15 percent. The administration views a deal on a global minimum tax as away to help ensure that U.S. companies are internationally competitive if the U.S. raises its corporate tax rate, as Biden has proposed. The G-20 is hoping to reach a political agreement on a global minimum tax at its meeting next month.

President Joe Biden's proposed tax hikes are forecast to bring in $3.6 trillion over the next decade, the Treasury Department said Friday, a key funding source for the $4 trillion he hopes to spend remaking the American economy and social safety net. The figure, representing the sum of all tax increases if enacted by Congress, came as is part of the "Greenbook" report that accompanies thewhite House's $6 trillion 2022 budget request, also released on Friday. It effectively serves as the revenue side of the ledger, against Biden's spending priorities in the budget.

A Group of Seven meeting thisweek is unlikely to settle on a rate for a global minimum corporate tax, Japan's Finance Minister Taro Aso said, sounding a note of caution before he and his counterparts gather in London. Expectations of a preliminary deal between theworld's richest economies have risen after the Joe Biden administration made proposals on both a minimum rate and rules to reallocate tax revenues of the biggest multinational firms. France's Finance Minister Bruno Le Maire said lastweek that the June 4-5 meeting must give momentum to clinching a global accord in mid-July.

French Finance Minister says U.S. proposal for a global minimum tax on corporations of 15% is a "good compromise," but the key question is clearly to have a compromise and agreement about the two pillars: digital taxation and minimum taxation." Le Maire says there must be a political agreement on both elements of international tax negotiations by the G-20 meeting in July at the latest.

The Organization for Economic Cooperation and Development's two-part planwould see more corporate profits attributed to the countrieswhere companies make sales, known as "Pillar One," and establish a global minimum corporate tax rate, known as "Pillar Two." The U.S. in April pitched a proposal thatwould narrow the OECD plan and target 100 of the largest and most profitable companies. Crapo called for Treasury to report to Congress on how many U.S. companieswould be among the roughly 100 firms thatwould see their profits reallocated under the U.S. Pillar One proposal, and how the planwould affect U.S. tax revenue.

The EU's digital levywill be broadly based so as not to discriminate against U.S. tech firms, a top European Commission tax official said Tuesday. The governments of France, Spain, and Italy, among others, have unilaterally acted to create their own digital services taxes. That drew the ire of the Trump administration,which argued that they unfairly targeted U.S. tech firms because of their high thresholds for earnings. It opened trade investigations to determinewhether they justified the imposition of retaliatory tariffs. Angel said that the EU's taxwould show that concerns that the new digital levywould be similar to these taxes are misplaced.

Germany and France said discussions on a global agreement on corporate tax rateswere entering the home stretch and that a deal could be reachedwithinweeks. French Finance Minister Bruno Le Maire indicated support for a U.S. proposal to set the minimum rate at 15%, calling it an "interesting and solid basis" for discussion.

A global agreement that could reshape the tax landscape for the biggest corporations is approaching a crucial first stage as the Group of Seven nations hone in on an accord that might feature both a minimum rate and encompass digital giants. If finance ministers due to meet virtually on Friday and in person nextweek can find enough common ground, that could pave theway for awider consensus to formwithin the Group of 20, building a foundation for theworldwide agreement that is in negotiators' sights.

European governments are increasingly optimistic that the G-7 could mark a breakthrough after U.S. President Joe Biden's administration made proposals on the two pillars of the talks:where to tax firms in the digital era, and a minimum rate. Le Maire said thatwhile the U.S. proposal for a 15% floorwould feature in the London talks, the key issue for France remains new rules on how to divide up rights to tax multinationals -- the so-called pillar one of international negotiations. Onwednesday, he said that, subsequent to a recent U.S. proposal to limit rules to the 100 biggest firms, there is progress toward ensuring digital giants are covered.

A paper published by the IMF argues that the joint adoption of the European Commission's common consolidated corporate tax base proposal and a global minimum tax rate may help address distortions caused by tax competition.

President Biden on Friday unveiled $3.6 trillion in tax increases onwealthy Americans and big corporations to pay for his plans to combat climate change, reduce income inequality and significantly expand the nation's social safety net.

The Group of Seven top advanced economies are close to an accord on the corporate taxation of multinationals, paving theway for a global deal later in the year to create new rules for the imposition of levies on theworld's largest companies.

Representatives of the 27 EU member states agreed on May 26 to amend their position on public country-by-country reporting, according to three diplomatic sources.

If the G-7 members can reach agreement on a two-pillar global tax reform plan, then theywill send a powerful message to other countries ÔøΩ even resistant ones ÔøΩ to get on board, France's finance minister said.

The United States' proposed corporate minimum tax rate floor of 15 percent amid OECD global tax reform talks should not detract from Irish-U.S. relations, the Houseways and Means Committee chair said.

Lee Sheppard analyzes the General Court of the European Union (GCEU)'s recent decision inEngie,which she argues treated an affiliated group as a single taxpayer, and applied the step transaction doctrine on the basis of substance rather than form.

The Senate's top Republican taxwriter,Senate Finance Committee ranking member Mike Crapo, R-Idaho, has asked Treasury for further analysis about its position in OECD-led tax reform negotiations ÔøΩ and for a promise that any deal emerging from those talkswon't discriminate against American companies.

Green book provides more detail on Biden administration's minimum book tax proposal.

Green book provides more detail on Biden administration's GILTI and SHIELD proposals.

The African Tax Administrators Forum is urging an OECD-led effort to overhaul global tax rules to target companieswith revenue over 250 million euros ($302 million). The group released a plan thatwould simplify part of the OECD plan aimed at reallocating the profits of multinationals to countrieswhere they have users and customers but a limited physical presence.

The improving macroeconomic climatewill open opportunities for more global expansion and growth, aswell as for diversification of supply chains. In addition, governments looking to boost the economic recovery may roll out new tax incentives.Many countries, including the U.S. and the U.K., are reviewing their research and development (R&D) tax incentiveswith a goal to further encourage investment to invigorate the economy. China has recently renewed a slew of tax incentives available to businesses and has significantly enhanced the R&D "super deduction" available to manufacturing enterprises.

The Biden administration proposed a global tax on multinational corporations of at least 15 percent in the latest round of international tax negotiations, Treasury Department officials said on Thursday, as the U.S. looks to reach a dealwith countries that fear hiking their rateswill deter investment.

The Biden administration has signaled itwill accept a 15 per cent global minimum tax on large multinational companies, in international talks aimed at increasing revenues from corporations that operate across borders.US officials have been meeting negotiators from countries taking part in OECD talks thisweek to discusswhat that minimum tax rate should be. The Biden administration had previously proposed 21 per cent, according to the US Treasury.

Biden's Made in America Tax Plan seeks to promote nascent green technologies via targeted tax incentives; encourage adoption of electric vehicles; support further deployment of alternative energy sources, such as solar andwind power; and endwhat it characterizes as long-entrenched subsidies for fossil fuels.

Where does the IMF see things heading? Increasingly toward destination-based taxation, although it believes it's too early for a destination-based cash flow tax or formulary apportionmentwith a sales factor. In the meantime, the institution believes thatwewill continue to see greater adoption of consumption taxes at the expense of corporate and labor taxes, because they achieve similar effects and are alreadywell used.

Members of the European Parliament (MEPs) and tax observers cast doubt onwhether the European Commission's reworked common consolidated corporate tax base proposal, expected in 2023, can become lawwithout qualified majority voting on tax matters.

The rejection in the Amazon judgment of the European Commission's arguments regarding the proper application of the transactional net margin method (TNMM) raises doubts about the viability ofwhat has become a recurring argument in state aid cases.

The European Commission must explain how a digital levywould alignwith an agreement on the pillars of the OECD tax reform project, and priority should be given to the latter, French sources said.

The United States has proposed a 15 percent rate as a starting point for OECD-led negotiations on a global minimum corporate tax regime as part of a sweeping plan to modernize the international tax system. According to a May 20 Treasury readout, "discussions on the global corporate minimum tax rate began in earnest" during two days of meetingswith the steering group of the OECD inclusive framework on base erosion and profit shifting.